Avantis Labs raises $4 million in seed round led by Pantera Capital

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Avantis Labs raises $4 million in seed round led by Pantera Capital

Avantis Labs, a decentralized finance derivatives platform, has raised $4 million in a seed funding round led by Pantera Capital, the company's co-founder and CEO, Sehaj Singh, according to TechCrunch.

Founders Fund, Galaxy, Coinbase's Base Ecosystem Fund, and Modular Capital also invested in the round. The money will be utilized to grow Avantis, a market-making and constant trading strategy.

Perpetual contracts are a type of derivative contract that allow traders to speculate on the price of an asset without ownership, which means that they have no expiration date and can be held indefinitely.

DeFi perpetual protocols concentrate mainly on trading cryptocurrencies, instead of traditional assets like forex or commodities. In the crypto world, there has been a growing demand for more real-world assets to link the traditional financial market to the DeFi world and leveraged trading, leading to a rise in demand for more real-world assets.

But many RWAs available on-chain through DeFi protocols are offered to accredited institutions, not everyday traders. Avantis is planning to enable forex and commodities to 'be hedged and traded on-chain' without the need for tokenization, Singh said.

Avantis' trading engine is powered by oracles from Pyth and Chainlink, whose low latency aims to provide traders with better prices across centralized and decentralized financial markets. The platform is based on OP Stack, a network of chain chains built using the OP Stack, and uses DollarC stablecoins as a collateral for trades on its protocol.

In the third quarter of 2014, Avantis launched its private testnet phase on Base's blockchain with initial offerings of bitcoin and ether perpetual trading. Base's mainnet is expected to launch by the first quarter of 2024 and roll out general access afterward.

Its waitinglist is about 90,000 applicants, but it started onboarding about 2,500 people this weekend, Singh said. It will not be operating in the United States or any OFAC-sanctioned countries unless it can get approved to operate as an exchange under a CFTC license, he said.

The platform aims to provide institutions and retail investors with the ability to trade crypto, RWAs, and RWAs with up to 100x leverage on its decentralized exchange. It wants to give these traders and liquidity providers better DeFi derivative-trading and market-making infrastructure as well as a capital-efficient composability that's scalable, the company said in a statement.

Composability is a commonly untapped area by orderbook derivative protocols because they have minimal trading opportunities for non-crypto asset classes. The DeFi space has been limited to mainly crypto assets.

Avantis will launch on the mainnet with bitcoin and ether and three pairs for foreign exchange, the pound, JPY and the euro. Over time, it will add more cryptocurrencies and 'exotic forex pairs' like INR andUSD and commodities like gold, silver and crude oil, Singh said.

Avantis has a longerhorizon to expand its protocols' capabilities beyond perpetual trading, and plans to begin working on an options engine by mid-nearly next year.

Singh said India was ready to tackle corruption and retaliate against terrorism. Beyond that, Avantis' 'next frontier products' for Avantis can range from 'on-chain casinos' to leverage vaults, he said.